Michael Timothy Dolan, of Minneapolis, Minnesota, a stockbroker currently registered with Dougherty & Company LLC, was charged by Financial Industry Regulatory Authority Department of Enforcement in a Complaint alleging that Dolan effected unauthorized private securities transactions. Department of Enforcement v. Dolan, No. 2013039306601 (Dec. 14, 2016).
According to the Complaint, from October of 2010 to October of 2013, Dolan had taken part in the sale of $850,000.00 worth of hedge fund membership interests with six individuals. Apparently, five of the six individuals were Dougherty & Company customers. Dolan reportedly failed to notify his firm concerning the transactions.
Particularly, the hedge fund, PC, was created in October of 2010 for the purposes of enabling investors to gain diversified investment exposure to small and mid-cap publicly traded firms. Apparently, the fund, which is based in Minneapolis, happens to be managed and operated by RE, by way of a Minnesota based investment adviser, PC Management which RE owns and manages.
Apparently, in May of 2011, PC started to sell non-managing membership interests in the fund to certain investors who were accredited, by way of an exempt offering per Securities Act of 1933 Regulation D. The Complaint stated that such offering had not been approved by Dougherty & Company for purposes of positioning to the firm’s customers via registered representatives.
The Complaint alleged that Dolan, in 2012, solicited his Dougherty & Company customers to make investments in the exempt offering. FINRA found that the Dolan’s failure to notify his firm concerning the offering, which was made to customers GN, AH, TH, DD, JZ, and SZ, was conduct violative of FINRA Rules 2010 and FINRA Rule 3040.
FINRA Public Disclosure reveals that on December 24, 2008, a customer initiated investment related arbitration action involving Dolan’s conduct was settled for $30,000.00 in damages based upon allegations that Dolan breached his contractual and fiduciary duties to the customers, and effected unauthorized purchases of Thornburg Mortgage Corporation in the customers’ accounts on three occasions.
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